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how far can your PPC scale?
AffiliateDreamer

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3771 posted 1:51 am on Jan 24, 2005 (gmt 0)


Say you set yourself with a $1k budget for a month, you get some experience, and double it, and so on. How far can you take it being a 1-man operation?

I'd imagine that these campaigns require some watching-over, ensuring the ROI is comign through on the campaigns etc., how much/many campaigns can one person moderate?

If one gets up to a 10K budget, with a modest 10-15% ROI, that's still 'only' $1-1.5K / month.

To make $5K/month would require a adwords portfolio of about $30-50K/month!

am I looking at this the wrong way?

 

BeauCreative

5+ Year Member



 
Msg#: 3771 posted 2:04 am on Jan 24, 2005 (gmt 0)

Well you have a couple of options here. You can

1) Build up a bigger budget over time
2) Get a loan.
3) Use credit cards

My favorite method is the use of credit cards. This way, you can use your max credit limit and then pay off your bill in full when your affiliate checks come.

This is what I do every month. Even though I have built up enough capital over time, credit cards have the benefit of rewards programs (think of getting 20,000 rewards points per month on a travel card).

AffiliateDreamer

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3771 posted 2:11 am on Jan 24, 2005 (gmt 0)

Beu,

I'm assuming your monthly budget has gotten fairly large. Is it very time consuming to monitor setup/tweak your PPC campaigns?

I guess you have to balance between the # of campaigns and ROI and not get into affiliates that aren't worth your while. But the issue is if I build up some campaigns learning as I go, I might just have a 10's of programs that are giving only a small daily return, how can one manage all of this?

BeauCreative

5+ Year Member



 
Msg#: 3771 posted 3:21 am on Jan 24, 2005 (gmt 0)

It isnt particularily time consuming to create profitable affiliate campaigns, but it can get time consuming optimizing them all.

I just create them and if they are profitable, I let them go. I calculate what my conversion rate needs to be and as long as it is above that, I know I am making a profit. I dont worry too much about how much profit until the end of the month.

When I notice campaigns that could use some optimizing, or campaigns that are particularily profitable, then I spend some time on them. I manage 50-100+ campaigns at a time. A lot of them dont make a lot of money, but it all adds up.

It is also helpful to affiliate networks (like CJ and others) so that all of your revenue stats are in one place.

eyeinthesky

10+ Year Member



 
Msg#: 3771 posted 3:58 am on Jan 24, 2005 (gmt 0)

If one gets up to a 10K budget, with a modest 10-15% ROI, that's still 'only' $1-1.5K / month

That would be a very low ROI indeed. I would aim for an ROI of at least 200% to be on the safe side with PPC :)

AffiliateDreamer

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3771 posted 4:33 am on Jan 24, 2005 (gmt 0)

well if one could get even 25% ROI per month, that's like day trading!

200%, your kidding right? Sure some may, but accross the board i'm sure most are not getting such crazy numbers!

GuitarZan

10+ Year Member



 
Msg#: 3771 posted 4:36 am on Jan 24, 2005 (gmt 0)

Hey,

I agree with eyeinthesky. I would shoot to at least double your money. Go for $2 everytime you spend a dollar. I have been there optimizing a campaign and making like 30% ROI... It sucks.

C.K.

gopi

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3771 posted 4:38 am on Jan 24, 2005 (gmt 0)

>> That would be a very low ROI indeed

Me think the same , my minimum ROI creteria is 50% ...IMHO 10% is very low and not worth investing time/money

AffiliateDreamer

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3771 posted 4:41 am on Jan 24, 2005 (gmt 0)

What sort of % of visitors to sale/lead does that work out to be with a 50/100/200/300% ROI?

those are crazy numbers!

BeauCreative

5+ Year Member



 
Msg#: 3771 posted 5:31 am on Jan 24, 2005 (gmt 0)

I do get good ROI like that, my best so far is ~600% I think. But I never would have gotten that if i hadent been trying out many different campaigns.

As long as a campaign is making a profit, I keep it going, even if it is only making a 10% return, that is better than my money sitting in the bank. If I ever need to cut back on expenses, then that is when I cut down on the lowest performing campaigns.

You would be suprised how fast a few low ROI campaigns can add up to total profit.

eyeinthesky

10+ Year Member



 
Msg#: 3771 posted 5:42 am on Jan 24, 2005 (gmt 0)

AffiliateDreamer, look at this thread, msg #:22 ==>

[webmasterworld.com...]

MovingOnUp

10+ Year Member



 
Msg#: 3771 posted 8:09 am on Jan 24, 2005 (gmt 0)

50-100% ROI and better is certainly possible. Due to fluxuations, I usually aim for a 100% ROI.

One of my most successful campaigns ran about a 1000% return ($500 spend, $5000 profit). Unfortunately, the merchant ran out of inventory and I haven't found a suitable replacement.

I haven't found any situations where you can just double your budget to double your earnings. I usually go in to each campaign with the maximum recommended budget and a maximum CPC that I project will give a 100% ROI. After I have sufficient history, I adjust the CPC, optimize the keywords and ad text, and let it run.

AffiliateDreamer

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3771 posted 4:01 pm on Jan 24, 2005 (gmt 0)

has googles change in policy for adwords affected ROI?

You have to create a landing page to pre-sell the visitor?

I'm guessing many people will try and copy the merchant's page (if they don't know how to presell themselves at least).

AffiliateDreamer

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3771 posted 7:34 pm on Jan 24, 2005 (gmt 0)

any thoughts? Really curious how forced landing pages has effected ROI accross the board...

GuitarZan

10+ Year Member



 
Msg#: 3771 posted 8:39 pm on Jan 24, 2005 (gmt 0)

Hey,

ROI should go up if you do the landing page properly. Just think about it. All the affiliates that were just sending straight to the affiliate are gone! IMO an Affiliate using Adwords properly just got a way bigger paycheck.

All the Best,

C.K.

Import Export

10+ Year Member



 
Msg#: 3771 posted 11:09 pm on Jan 24, 2005 (gmt 0)


10% ROI can be wonderful, if your making it from an automated system thats replicating that 10% from 10,000 other products/sites.

MovingOnUp

10+ Year Member



 
Msg#: 3771 posted 3:03 am on Jan 25, 2005 (gmt 0)

I can't really comment on how Google's latest changes affect ROI, because I've never linked directly to any merchant.

There are other dangers with a 10% ROI. What if a merchant goes out of business? You might be stuck with 2-3 months of CPC charges before you know that you aren't going to get paid. If you're only running 10% ROI, that could wipe out YEARS worth of profits.

jonstark

5+ Year Member



 
Msg#: 3771 posted 6:48 pm on Jan 25, 2005 (gmt 0)

My highest ROI is around 2700%, but it isn't all about ROI. A 10% ROI can actually mean more profit - it depends on how big the market is that you're attacking. If you only spend 2 cents and make 5 dollars, well that's an incredible ROI but at the end of the day you've only made a profit of $4.98. And sometimes it isn't just a question of upping your bids to get more traffic - on obscure keywords, you might get only one or two clicks a day. On the other hand, if you hook into a big enough market niche and spend $50k in one day but only make a ROI of 10%, well you've still made 5k in one day.

If you wade into the affiliate pool, though, you're swimming with sharks. Competition is intense and most people can't hack it. Don't go into it thinking it won't be work. Something like 97% of people who try it crash and burn, and 90% of those who succeed only make like $30/day (of course, that's an extra grand a month, and I remember how excited I was when I first reached that level). But if you're a really creative thinker, you can find converting traffic at low cost. You've got to be willing to do the heavy lifting as far as overseeing your campaigns, guarding against click fraud, and tracking right down to the keyword.

What are the limits? I used to think doing $400 profit a day was a lot... nowadays I do more than triple that, and I know of someone who does 3k/day in net profit (I understand he spends 1k/day to do it... but I don't know this fellow personally, just a friend of a friend so I can't confirm. I have no trouble believing it though). I don't know that there are any limits, but it would be foolish to try to find out. Affiliate marketing is a cheap and easy way to find a good market and get a feel for how to sell to that market, but once you find a niche that converts it's probably best to abandon the affiliate approach and design your own website/product/service to fill it. That way you can cash in on the lifetime value of the customers you solicit instead of just getting the quick one-time commission. I need to practice what a preach a little more on this. :)

If you're worried about funding it, well you could take on a partner. If you're getting decent roi (and decent in ppc is usually at least over 50% daily) there aren't too many investors who would look at your business plan and say 'hmmm, 50%+ roi daily' who wouldn't want to invest.

Or you could go to a bank and ask for a line of credit. Again, with documentation of a successful business plan in action, most would be only too happy to meet your needs, I'm guessing.

But I'd be surprised if your affiliate ppc operation grows much faster than your ability to keep up with it.

As for how Google's change has impacted... sadly I haven't noticed any real changes. Maybe Google is all talk or maybe they're implementing it slowly. I was excited when they announced it, because I thought it might knock out some of the smartest competition (affiliate marketers using ppc are always smarter than straight merchants in their approach; they have to be because their profit margin is so much lower).

eyeinthesky

10+ Year Member



 
Msg#: 3771 posted 11:51 pm on Jan 25, 2005 (gmt 0)

Great post, jonstark & welcome to WebmasterWorld.

One question - for affiliate marketing, how do you track PPC performance down to every keyword? Is this possible?

BeauCreative

5+ Year Member



 
Msg#: 3771 posted 11:55 pm on Jan 25, 2005 (gmt 0)

It is possible, but very very time consuming and not worth it. You would have to make every keyword point to a unique tracking url (provided by your affiliate network).

For Overture you could just enter a different url for each keyword since they allow you to do this when you create a new campaign.

For Google, you could try using their {keyword} variable in your tracking url, but some keywords may not register. The other option would be to create a new ad group for each keyword.

The best method for tracking is to group related keywords and then track them separately, so that you have maybe only 5-10 different tracking urls.

eyeinthesky

10+ Year Member



 
Msg#: 3771 posted 12:09 am on Jan 26, 2005 (gmt 0)

Thanks, BeauCreative

Some merchants don't provide detailed referral stats so that's an issue too.

Anyway, thanks for the ideas :)

jonstark

5+ Year Member



 
Msg#: 3771 posted 4:36 am on Jan 26, 2005 (gmt 0)

It isn't always possible to track down to the keyword, it depends on the affiliate network. With LS and CJ you can, and most of the smaller ones have some tracking mechanism. As long as you can add a tracking tag, you can track back to the keyword. As Beau stated, since in overture you essentially are able to assign a different url to every keyword, you just change the identifying tag. I can't believe how easily he mentioned the {keyword} trick for Adwords - that's something I struggled with for a long time & I have to admit I didn't figure it out for myself. A friend of mine on another forum shared the tip with me. It's amazingly simple, and it makes a lot of sense; after all why shouldn't keyword insertion work in the url as well as in the other adcopy.

It is time consuming to track, especially with adwords, because remember that it delivers the keyword, but doesn't tell you whether it was broad, phrase, or exact match. So you have to add the total clicks for all three types together to truly learn the roi for any particular keyword. Also it takes time to get meaningful statistical data on any particular keyword, but you can identify strong winners and losers immediately, and in a broader sense you can see which adgroups are performers and which are not. You can also measure which ads in an adgroup are converting and which are not. I was crunching the numbers only a few days ago and in one adgroup I had 4 ads that all were getting 2.2% ctr (not great, but not in any danger). Google liked them all. But looking at the conversion rate over 40k+ clicks, I saw that one ad had an epc of 2 cents (heavy loser), one had an epc of 7 cents (break even), one had an epc of 10 cents (mild winner), and one had an epc of 19 cents. Well obviously I got rid of two of the ads immediately, and profitability has shot right up.

I respectfully disagree with Beau on one point: I do believe it is worth it. It is time consuming, but when you treat your business with the attention to detail it deserves, you can sometimes turn a break-even or mildly-losing campaign into a winner, so it's worth it to me.

For 2nd tier engines (and when promoting anything by Clickbank - a network I try to stay away from) I generally take the more general approach, separating by groups of related keywords, and then identifying the keywords that get large numbers of clicks and further subdividing them to track them separately.

Ruthless tracking is your only ally in this game, but it is a formidable one. If I hadn't been so hot on tracking, I wouldn't have discovered that one of the largest affiliate programs on the net was skimming 30%+ of sales/commissions from me... that's actually a topic for another thread though...

By the way, thanks for the welcome. :)

BeauCreative

5+ Year Member



 
Msg#: 3771 posted 4:58 am on Jan 26, 2005 (gmt 0)

nice points jonstark

to track whether a click comes from the content network or the search network, I usually create two campaigns. One that only shows to the search network, and one that only [should] show to the content network. Since the content network gets low ctr, this also allows you to see your actual CTR for ads and work on improving them. Google doesnt factor the content CTR into your keywords, but it does get factored into your ads, which can make it impossible to compare multiple ads at once.

The downside of doing this (and why i added "should") is because google says you cannot turn of the search network. So you have to settle for most of your search clicks going to the isolated campaign and some of them going to your "content network" campaign.

tsinoy

10+ Year Member



 
Msg#: 3771 posted 8:50 am on Jan 26, 2005 (gmt 0)

jonstark, good post! quick question for you not sure if you have another thread for what you said about merchants scheming against affiliates, I've built a website and found that 8 out 10 that goes through my website towards my merchant's shopping cart don't make a purchase, now I don't know if the visitors really left the site or the merchant is actually scheming against it's affiliates.

inasisi

5+ Year Member



 
Msg#: 3771 posted 3:57 pm on Jan 26, 2005 (gmt 0)

For Overture you could just enter a different url for each keyword since they allow you to do this when you create a new campaign.

Actually Overture has this feature called "Overture Tracking URLs" which adds a parameter called OVKEY, which lets you know which keyword triggered your ad.

ralent

10+ Year Member



 
Msg#: 3771 posted 11:05 pm on Jan 26, 2005 (gmt 0)

jonstark ... I'm quite sure everyone would get something out of a "skimming" thread if you felt up to starting it.

jonstark

5+ Year Member



 
Msg#: 3771 posted 3:22 am on Jan 27, 2005 (gmt 0)

tsinoy: I'm afraid I can't give you an answer other than trust your instincts. For as long as I've been affiliate marketing I've suspected fraud on the part of merchants and affiliate networks - leads disappearing at the end of the month with no explanation, sales having super high rates of returns or just not converting like they should, but I wasn't able to prove it until lately (not coincidentally, I got more hardcore on tracking and studied everything that happened). In your particular case, are you saying that you're able to track your visitors up to the point where they actually try to buy from the merchant, and then 8 of 10 don't convert? That seems very suspicious to me. If the visitors have first seen the product and the price, and are clicking on a 'buy now' button or somethingm, than that doesn't seem right. However, if I've misunderstood what you're saying and you're talking about 8 out of 10 clicks that come through your site don't convert, that could be on the up and up.

inasisi: Thanks, I never knew that before. Cool, something new to try out with overture. :)

ralent: I will start a new thread on that, giving good details of how I caught the fraud and seeing what everyone else's experiences have been with this. In my case I caught both the merchant and the affiliate clearinghouse both committing the fraud. We're still working on nailing down who took what, but it looks like the larger portion of stolen sales/commissions was perpetrated by the affiliate network. This is one of the biggest affiliate networks on the web, not some fly-by-night, and from my dealings with them I get the feeling this is business as usual. I've been really upset by this discovery, especially because ostensibly affiliate networks should be protecting our interests. We drive their sales, technically they work for us, not the other way around. They don't have some divine right of kings to steal our money and should have some accountability. The most alarming thing about this discovery though is the reaction of most other affiliates when I tell them about it. Very few are even perturbed, most just shrug and say 'well, that's sort of the cost of doing business'. If this is our attitude, than no wonder the affiliate networks feel they can rip us off. We deserve it if we don't do something... Anyway, you can see I'm passionate about it, but it shouldn't be in this thread, so I'll start another. :)

tsinoy

10+ Year Member



 
Msg#: 3771 posted 5:25 am on Jan 27, 2005 (gmt 0)

jonstark, you are right in your assumption... it's something like this to make it clearer for everyone else, say I drive 1000 visitors to my site and say about 20 of them clicks on the BUY NOW button, only about 4 out of 20 shows up as sale. It's pretty low in my opinion since they already decided to buy or at least they know all they want to know about the product, and yet they still decided not to buy... or maybe fraud?

I guess it's really hard to find out.

chrisgarrett

10+ Year Member



 
Msg#: 3771 posted 4:20 pm on Jan 27, 2005 (gmt 0)

I don't know if I am typical but starting november and over the xmas period my ROI started low and steadily increased until it got into crazy ROI numbers. Overall though in december I made just short of 100% ROI. The same campaign this month would have started costing me money if I hadn't bailed (the merchant is notorious for a high percentage of chargebacks).

jonstark

5+ Year Member



 
Msg#: 3771 posted 4:20 pm on Jan 27, 2005 (gmt 0)

That sounds like it's almost definitely fraud, and it also sounds like you can stop it pretty easily. Change the 'buy now' button so that instead of sending off the customer to the merchant site, it takes it to your own shopping cart. Have them buy from you, then turn around and buy through your own affiliate links from the merchant, and have them dropship the sale... It's complicated to setup, and there are potential problems (what do you do if the customer returns the items, etc) but you'll be able to find out what your true conversion rate is for people who click that 'buy now' button in a hurry.

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